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Report: IT Workers May See a Bump in Pay

By Anne Watkins

02/08/10

IT organizations are budgeting to give employees a small pay increase in 2010, according to a recent report.

Computer Economics' "2010 IT Salary Report" found that the typical IT worker will receive a 1.8 percent pay raise this year, with employees "in the trenches" receiving the highest increases. Mostly, the aim is to boost morale and retain workers during a time of budget cuts and layoffs. Developers likely will receive the largest raises, while executives and directors can expect the lowest pay hikes.

Compared with years before the recession, the 1.8 percent median pay raise could be considered meager. However, Computer Economics claims that these results show that the picture is improving for IT workers.

John Longwell, vice president of research at Computer Economics, said that the results can be seen as a positive or a negative.

"We see the beginning of a recovery in IT operational spending and hiring this year," Longwell said in an e-mail. "Raises may not be keeping pace with inflation, and there is still a lot of unemployment, but a recovery is occurring. From my perspective, wages are holding up, maybe better than expected. We think the outlook is getting brighter."

Median pay raises for IT workers increased from 2006 to 2007 (3 percent to 3.8 percent) and then declined in 2008 (3.5 percent) before plummeting in 2009 (2 percent), according to the Irvine, CA-based research firm. In comparison, a projected decline from 2 percent in 2009 to 1.8 percent in 2010 is much less dramatic.

Still, the expected 1.8 percent increase is not keeping up with the United States Consumer Price Index, which rose 2.7 percent last year, according to the Bureau of Labor Statistics.

The Computer Economics annual salary study projected that developers will receive the highest pay raises (2.1 percent), which includes application programmers, data analysts, database administrators, business analysts, architects, and others involved in the development of new systems and the maintenance of existing systems.

After developers, operations groups are expected to receive the next highest pay raises (2 percent), including computer operators, production control analysts, technical support representatives, help desk representatives, technical writers, and trainers.

Near the median of 1.8 percent is network and systems support personnel, including network administrators, system administrators, and Webmasters (1.9 percent), and then managers (1.7 percent). Finally, C-level executives and directors are expected to receive the smallest raises (1.3 percent).

Lower salaries for senior positions may be partly owing to incentive pay and compensation packages, according to Computer Economics. However, the study indicated that this also was an acknowledgment that the recession was harder on lower level employees.

For comparison, an August 2009 study by Hewitt, an HR consulting firm, found that base salary increases for salaried exempt employees in 2009 were 1.8 percent and were expected to increase to 2.7 percent in 2010. The Illinois firm based its findings on a survey of 1,156 companies in a variety of industries.

A recent report from consulting firm Janco found that IT salaries flattened after peaking in 2007 and then they started to decline in the fall of 2008. According to that report, salaries for IT personnel increased by 0.38 percent in 2009, while midsize enterprise salaries grew by 0.11 percent.

The Computer Economics report noted that even if most IT workers received raises, the median total compensation likely would not increase at the same rate. As companies hire new workers at lower salaries than those of the employees who were laid off, that factor could contribute to a decrease in the median salary levels.

Longwell said the report does not give insight into which job skills are most in demand. However, as development activity revives, programmers, business analysts, and project managers will be in demand, as they were before the downturn, he explained.

"Longer term, infrastructure jobs like system administrators, computer operators, and other people in the datacenter remain threatened by developments like cloud computing, datacenter automation, and datacenter consolidation," Longwell said. "There are efficiencies to be gained."

An earlier report from Computer Economics, "Outlook for IT Staffing and Spending in 2010," published in December 2009, estimated that IT budgets would rise by a median 2 percent this year. That report predicted that 2010 would be a period of stabilization and rebuilding. Moreover, 52 percent of IT organizations surveyed in that report expected to increase their IT operational budget in 2010 over 2009. Computer Economics predicted that as long as the number stayed above the 50 percent mark, the IT spending recession was over.

"We think many IT organizations are understaffed after all the budget cutting and [are] looking to restore some of those lost positions," Longwell said. "Not all of the lost jobs will come back, but some will. We don't anticipate much wage growth, though, while the unemployment rate remains so high."

Computer Economics used statistics collected and published by the U.S. Department of Labor to estimate median salaries, bonuses, and plans for pay raises for IT personnel. The firm projected compensation for 70 specific IT job titles in 73 U.S. metropolitan areas.

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